A bookkeeper's guide to Stripe clearing accounts

Stripe batches transactions together and pays out days later, combining multiple payments and deducting fees. Without a clearing account, matching that payout to individual transactions is a nightmare.

A clearing account is a virtual representation of your Stripe balance. It mirrors what Stripe is doing with your money, and makes reconciliation straightforward.

How Stripe actually moves money

When a customer pays £100 through Stripe:

1. Stripe collects £100 from the customer
2. Stripe deducts its fee (say, £2.90)
3. Stripe holds the money (typically 2-7 days)
4. Stripe pays out £97.10 to your bank

That payout might include dozens of transactions from different days, minus fees, minus refunds. If you're on automatic payouts (the default), Stripe includes whole payments in each payout, so you can see which transactions are included. But if you're using manual payouts, there's no breakdown. You have no way of knowing what makes up a given payout without cross-referencing your balance transactions.

Either way, your bank statement shows one deposit. Your accounts need to show all the underlying detail.

What a clearing account is

A clearing account is a bank account in your accounting software that represents your Stripe balance, not your actual bank account. It's where you record individual charges, fees, and refunds before they're paid out.

The account type should be a current asset. Some software calls this a "money in transit" account. It's not a real bank account you can withdraw from. It's a bookkeeping construct that makes your life easier.

The recording process

With a clearing account, every Stripe transaction gets recorded when it happens, not when the payout arrives.

When a payment comes in:

• Debit: Stripe Clearing Account £100
• Credit: Sales/Revenue £100

When Stripe takes their fee:

• Debit: Stripe Fees (expense) £2.90
• Credit: Stripe Clearing Account £2.90

When Stripe pays out to your bank:

• Debit: Bank Account £97.10
• Credit: Stripe Clearing Account £97.10

Why this works

Your Stripe Clearing Account balance should always match your actual Stripe balance. If it doesn't, you've missed something, and you'll know exactly where to look.

When that mysterious £4,847.23 payout lands in your bank, you don't need to reverse-engineer which invoices it covers. You simply record the payout as a transfer from the clearing account. The individual transactions were already recorded when they happened.

Month-end reconciliation becomes trivial. Check your Stripe balance against your clearing account balance. They should match. If they don't, check for:

• Payments recorded but not yet paid out
• Refunds you haven't recorded
• Fees that weren't captured
• Disputes or chargebacks

Handling refunds

When you refund a customer, the clearing account approach keeps things clean:

• Debit: Stripe Clearing Account (reduces the balance)
• Credit: Sales/Revenue (or a dedicated refunds account)

Note that Stripe doesn't refund their processing fee when you refund a customer. You lose out on that money. So your clearing account balance decreases by the full refund amount, but the fee you already paid stays on your books as an expense.

The refund reduces your clearing account balance, just like it reduces your real Stripe balance. When the next payout arrives, it'll be smaller, but the clearing account will already reflect that.

Common mistakes to avoid

Recording payments when the payout arrives. You lose the connection between payment and invoice. A payout that includes 47 transactions tells you nothing about which customers paid.

Ignoring Stripe fees. They add up, and they're tax-deductible. A business doing £100k through Stripe is paying £2,000+ in fees annually. If they're not on your P&L, your margins look better than they are.

Not reconciling regularly. Check your clearing account against your Stripe dashboard weekly, or at minimum monthly. Catching errors early is much easier than untangling months of transactions.

Mixing currencies. If you accept payments in multiple currencies and hold separate balances in Stripe, you need a separate clearing account for each currency. A single clearing account mixing GBP, EUR, and USD will never reconcile cleanly.

If you're using FreeAgent

ClearingHouse automates the clearing account approach for FreeAgent users.

When you connect your Stripe account, ClearingHouse creates clearing accounts in FreeAgent for each currency you hold in Stripe. Every balance transaction is recorded automatically: charges, fees, refunds, disputes, and adjustments.

Real-time recording. Transactions are recorded when they happen in Stripe, not when you get around to entering them.

Automatic fee tracking. Every Stripe fee is recorded as a separate expense. Nothing goes missing from your P&L.

Payout reconciliation. When Stripe sends a payout to your bank, ClearingHouse waits for your bank feed to update, then explains the transaction as a transfer from the clearing account.

Multi-currency support. Separate clearing accounts for each currency, created automatically when ClearingHouse sees a new currency in your Stripe balance.

Your clearing account balance always matches your Stripe balance because every transaction is recorded individually and accurately.

If you're using Xero, QuickBooks, or another accounting package, ClearingHouse doesn't support those yet. The manual approach described above will work in any software that lets you create bank accounts.

Getting started

If you're setting up clearing accounts manually, create one bank account in your accounting software for each currency you hold in Stripe. Set them as current assets, and discipline yourself to record every Stripe transaction when it happens.

If you're using FreeAgent, set up ClearingHouse and let it handle the whole thing automatically. It takes a few minutes, and your Stripe reconciliation becomes something you can stop thinking about.